Ballero v. 727 Inc., et al
ORDER AND REASONS: IT IS ORDERED that the 54 and 55 motions for summary judgment are GRANTED, and this action is thereby DISMISSED. All other pending motions are DISMISSED AS MOOT. Signed by Judge Ivan L.R. Lemelle on 9/22/2017.(jls)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
FRANK W. BALLERO
727 INC., ET AL.
ORDER AND REASONS
Incorporated and 721 Bourbon, Inc.’s “Motion for Summary Judgment”
(Rec. Doc. 54) and Defendant Crescent Crown Distributing, LLC’s
“Motion for Summary Judgment” (Rec. Doc. 55). Plaintiff timely
Defendants 727, Incorporated and 721 Bourbon, Inc. then requested,
and were granted, leave to file a reply memorandum. Rec. Doc. 601. For the reasons discussed below,
IT IS ORDERED that the motions for summary judgment (Rec.
Docs. 54-55) are GRANTED, and this action is thereby DISMISSED.
All other pending motions are DISMISSED AS MOOT.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This case arises out of the sale of a red ale beer known as
Pirate’s Blood. Rec. Doc. 1 at ¶ 5. Frank W. Ballero (“Plaintiff”)
claims that he invented and began brewing the beer in 2009. Id. He
also developed a “logo and mark” for the beer. Id. The beer was
subsequently sold by various bars, including the Funky Pirate
located at 727 Bourbon Street, New Orleans, Louisiana 70116 and
owned by 727, Incorporated (“Defendant 727”) and Tropical Isle
Bourbon located at 721 Bourbon Street, New Orleans, Louisiana 70116
and owned by 721 Bourbon, Incorporated (“Defendant 721”). Id.; see
also Rec. Doc. 8-1 at 1 n.1.
In March of 2011, Plaintiff stopped producing Pirate’s Blood.
Rec. Doc. 1 at ¶ 6.1 Yet, the Funky Pirate and Tropical Isle Bourbon
continued to sell a beer called “Pirate’s Blood,” “use the same
exact tap handle bearing [Plaintiff’s] Pirate’s Blood logo and
name,” and tell customers that the beer “is locally brewed and
sold exclusively” at these two bars. Id. In his response to the
instant motions, Plaintiff clarifies that Defendants started using
Killian’s Irish Red Ale as the Pirate’s Blood replacement and that,
“[i]nstead of using a Killian’s Red Ale tap handle, Defendants
continued to use the Pirate’s Blood tap handle.” Rec. Doc. 56 at
2 (citations omitted).
According to Plaintiff, the beer “passing off as Pirate’s
Distributing, LLC (“Crescent”). Rec Doc. 1 at ¶ 7. Crescent
regularly visits the Funky Pirate and Tropical Isle Bourbon “to
maintain and clean the equipment associated with the product it
See also Rec. Doc. 56 at 1 (where Plaintiff explains that he stopped
distributing Pirate’s Blood in March of 2011 after the Covington Brewhouse,
formerly known as Heiner Brau Brewhouse, “refused to continue to contract brew
the beer”) (citation omitted).
has sold, i.e. the beer tap lines,” and therefore is “complicit in
the deception.” Id.
requesting injunctive and monetary relief pursuant to § 43(a) of
the Lanham Act, 15 U.S.C. §§ 1125(a), 1116, 1117, and the Louisiana
Unfair Trade Practices Act (“LUTPA”), Louisiana Revised Statute §
51:1401-1428.2 Rec. Doc. 1 at ¶¶ 12, 15.
In response to Defendants’ original motions to dismiss (Rec.
Docs. 8, 15), Plaintiff filed an amended complaint on February 2,
2017 asserting that he “met with various persons and companies in
2012, 2013, 2014, and 2015 regarding the production and sale of
Pirate’s Blood” and that he “fully intended/intends to continue
brewing and selling Pirate’s Blood under its trademarked name and
logo” (Rec. Doc. 21). Before the Court could rule on the original
motions to dismiss, Defendants 727 and 721 filed a second motion
to dismiss in response to the amended complaint. Rec. Doc. 24.
Nonetheless, Defendants’ original motions were denied without
prejudice on February 22, 2017. Rec. Doc. 29. Defendant Crescent
then filed its second motion to dismiss. Rec. Doc. 30.
Named as Defendants were 727, Crescent, Tropical Isle Beverages, LLC, and
Tropical Isle’s Original Papa Joe’s, Inc. Rec. Doc. 1 at ¶ 2. In its motion to
dismiss, Defendants 727 and 721 explain that they are the owners of the bars at
issue and that Tropical Isle Beverages, LLC and Tropical Isle’s Original Papa
Joe’s, Inc. “have no relationship to the factual allegations in the Complaint.”
Rec. Doc. 8-1 at 1 n.1. Accordingly, those parties were terminated from the
On March 28, 2017, this Court denied the motions to dismiss
without prejudice to re-urge on a motion for summary judgment after
the exchange of discovery. Rec. Doc. 41 at 15. On August 22, 2017,
Defendants accordingly filed the instant motions reiterating the
abandonment arguments made in their earlier motions to dismiss.
Rec. Docs. 54 at 1; 55 at 1.3
LAW AND ANALYSIS
Under Federal Rule of Civil Procedure 56, summary judgment is
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as
a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (quoting FED. R. CIV. P. 56(c)). See also TIG Ins. Co. v.
Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002). A
genuine issue exists if the evidence would allow a reasonable jury
to return a verdict for the nonmoving party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). The movant must point to
affidavits, if any,’ which it believes demonstrate the absence of
a genuine issue of material fact.” Celotex, 477 U.S. at 323. If
In their motion for summary judgment, Defendant Crescent simply adopted the
arguments made by Defendants 721 and 727, pursuant to Federal Rule of Civil
Procedure 10(c). Rec. Doc. 55-1 at 1.
and when the movant carries this burden, the non-movant must then
go beyond the pleadings and present other evidence to establish a
genuine issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986).
However, “where the non-movant bears the burden of proof at
trial, the movant may merely point to an absence of evidence, thus
shifting to the non-movant the burden of demonstrating by competent
summary judgment proof that there is an issue of material fact
warranting trial.” Lindsey v. Sears Roebuck & Co., 16 F.3d 616,
618 (5th Cir. 1994). Conclusory rebuttals of the pleadings are
insufficient to avoid summary judgment. Travelers Ins. Co. v.
Liljeberg Enter., Inc., 7 F.3d 1203, 1207 (5th Cir. 1993); Douglass
v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1429 (5th Cir. 1996)
superseded by statute on other grounds, 28 U.S.C. § 636(b)(1)
assertions are inadequate to satisfy the non[-]movant’s burden”)
“To recover on a claim of trademark infringement, a plaintiff
must first show that the mark is legally protectable and must then
establish infringement by showing a likelihood of confusion. To be
protectable, a mark must be distinctive, either inherently or by
achieving secondary meaning in the mind of the public.” Am. Rice,
Inc. v. Producers Rice Mill, Inc., 518 F.3d 321, 329 (5th Cir.
2008)(internal citations omitted). See, e.g., Action Ink, Inc. v.
Anheuser-Busch, Inc., 959 F. Supp. 2d 934, 948 (E.D. La. 2013),
aff’d sub nom. Action Ink, Inc. v. N.Y. Jets, L.L.C., 576 F. App’x
presupposes the existence of a valid mark”) (citing La. World
Exposition, Inc. v. Logue, 746 F.2d 1033, 1039-40 (5th Cir.
Yet, “[o]wnership of trademarks is established by use,
not by registration.” Union Nat'l Bank of Tex., Laredo,
Tex. [v. Union Nat’l Bank of Tex., Austin, Tex.], 909
F.2d [839,] 842 [(5th Cir. 1990)]; see also 15 U.S.C. §
1127 (defining a trademark as a “word, name, symbol, or
device ... used by a person, or which a person has a
bona fide intention to use in commerce,” and in turn
defining “use in commerce” as “the bona fide use of a
mark in the ordinary course of trade, and not made merely
to reserve a right in a mark” (emphasis added)). And
under the Lanham Act, even if a registrant has owned the
mark at one time—indeed, even if the trademark
registration has become inconstestable—an opposing party
may successfully defend against an infringement claim by
showing that the registrant has abandoned the mark. See
15 U.S.C. § 1115(b)(2). A mark is deemed abandoned if
“its use has been discontinued with an intent not to
resume such use.” 15 U.S.C. § 1127.
Action Ink, 959 F. Supp. 2d at 942. Similarly, actions for false
competition under either the Lanham Act or the LUTPA may be
defended against by demonstrating that the plaintiff abandoned
their use of the mark. Id. at 948 (citing Riggs Mktg. Inc. v.
Mitchell, 993 F. Supp. 1301, 1305 (D. Nev. 1997)).
“The party asserting abandonment must establish that the
owner of the mark both (1) discontinued use of the mark and (2)
intended not to resume its use.” Action Ink, Inc. v. N.Y. Jets,
LLC, No. 12-46, 2013 WL 12106878, at *3 (E.D. La. June 20, 2013),
adhered to on denial of reconsideration, 2013 WL 5532781 (E.D. La.
Oct. 4, 2013), aff’d sub nom. 576 F. App’x 321 (citation omitted)
(granting summary judgment in favor of the defendants on claims of
federal trademark infringement and false designation of origin
infringement and unfair competition).
Further, under the Lanham Act, nonuse “for 3 consecutive years
shall be prima facie evidence of abandonment.” 15 U.S.C. § 1127.
This creates a “rebuttable presumption of intent not to resume
[use].” Action Ink, 2013 WL 12106878, at *4 (quoting Cumulus Media,
Inc. v. Clear Channel Commc’ns, Inc., 304 F.3d 1167, 1172 (11th
Cir. 2002)). “Once the rebuttable presumption . . . has been
established, the burden of production then ‘[s]hifts to [the
holder] to produce evidence that [it] either used the mark during
the statutory period or intended to resume use.’” Id. (quoting
Nat. Answers, Inc. v. SmithKline Beecham Corp., 529 F.3d 1325,
1330 (11th Cir. 2008)). The intent to resume use must manifest
during the three-year period of non-use. Specht v. Google, Inc.,
758 F. Supp. 2d 570, 594 (N.D. Ill. 2010), judgment entered, No.
09-2572, 2011 WL 4737179 (N.D. Ill. Oct. 6, 2011), and aff’d, 747
F.3d 929 (7th Cir. 2014) (citations omitted); Buck v. Palmer, No.
08-572, 2013 WL 11323280, at *3 (W.D. Tex. July 10, 2013) (citation
omitted) (further noting that “evidence adduced after the threeyear period is relevant to the extent it demonstrates intent during
the period”); Louangel, Inc. v. Darden Rests., Inc., No. 12-147,
2013 WL 2452664, at *2 (S.D. Tex. June 5, 2013) (citation omitted).
However, “[t]he intent to resume cannot be far-flung or
indefinite; rather there must be an intent to resume use within
the reasonably foreseeable future.” Action Ink, 2013 WL 12106878,
at *8 (quoting Nat. Answers, 529 F.3d at 1330 (quoting Silverman
v. CBS Inc., 870 F.2d 40, 46 (2d Cir. 1989))) (quotation marks
omitted). “Essentially, the trademark holder must come forward
with objective, hard evidence of actual concrete plans to resume
use in the reasonably foreseeable future when the conditions
requiring suspension abate.” Id. (quoting Emmpresa Cubana Del
Tabaco v. Culbro Corp., 213 F. Supp. 2d 247, 268 (S.D.N.Y. 2002)
(quoting Silverman, 870 F.2d at 46))(emphasis added). “Thus, ‘a
bare assertion of possible future use is not enough’ to prove an
intent to resume use.” Id. (quoting Silverman, 870 F.2d at 47).
In Action Ink, after a fifteen-year period of nonuse, renewal
of the mark and actions against alleged infringers, in light of
the fact that there was no evidence that the holder used the mark
in commerce or had plans to use the mark in commerce, were “minor
activities” that were “inadequate to show an intent to resume use.”
2013 WL 12106878, at *9-10. Further, the holder’s declaration that
there was never an intention to abandon the mark amounted to “self8
judgment. Id. at *10.
Similarly, in Silverman, the Second Circuit determined that
the holder’s “actions in licensing the programs for limited use in
connection with documentary and educational programs, challenging
infringing uses brought to its attention, renewing its copyrights,
programs” were minor activities that did not amount to use. 870
F.2d at 47-48. “Such uses do not sufficiently rekindle the public’s
identification of the mark with the proprietor, which is the
establish an intent to resume commercial use.” Id. at 48.
In Specht v. Google Incorporated, the holder pointed to four
activities that he believed showed his continued use of the mark:
(1) he attempted to sell his business assets; (2) he did not cancel
his phone service; (3) he continued operating his website; and (4)
he conducted two sales efforts, including a mass mailing and a
failed bid to license software. 747 F.3d 929, 934-35 (7th Cir.
2014). According to the Seventh Circuit, these activities did not
amount to “use” because (1) “an effort to sell the assets of a
business is different from trading on the goodwill of a trademark
to sell a business’s goods or services”; (2) his phone expenses
for the year after he allegedly stopped using the mark were
included in a balance sheet from the previous year “precisely
because, in his view, [the company] did not operate in [the later
year]”; (3) “he did not identify any goods or services [the
company] could have provided through or in connection with the
website after [his use allegedly ceased]”; and (4) his sales
efforts “were isolated and not sustained; sporadic attempts to
plaintiff’s argument that the mass mailing evidenced an intent to
publicized its use of the mark; in other words, by the time of the
mass mailing, the mark was permanently abandoned. Id. at 935-36.
In Rivard v. Linville, the plaintiff appealed the Trademark
Trial and Appeal Board’s decision to cancel his registered mark
for ULTRACUTS, used in connection with hair and beauty salon
services, because he abandoned the mark without an intention to
commence use in the United States. 133 F.3d 1446, 1447 (Fed. Cir.
1998). The plaintiff registered the mark in 1986, but the defendant
filed a petition to cancel the mark in 1991. Id. at 1447-48. During
the litigation, the plaintiff produced evidence that in 1984 he
examined a competitor’s salon and met with a commercial realtor in
Hawaii; in 1986 he discussed leasing space in a Minneapolis mall;
consultant (and was convinced to concentrate on developing a
competitor’s operation; in 1988 he traveled to Tampa and Las Vegas
and considered opening salons in those locations; in 1989 he again
investigate purchasing an existing salon; in 1990 he traveled to
North Dakota to investigate salon locations; and in 1991 he met
with the manager of a Grand Forks mall. Id. at 1448. Under the law
in effect in 1991, “a petitioner established a prima facie case of
abandonment with proof of nonuse in the United States for two
consecutive years.” Id. at 1449 (citations omitted). The court
connection with hair and beauty salon services in the United States
during the relevant time period. Id. It subsequently found the
presumption of abandonment. Id. The court described this evidence
as “sporadic trips to the United States, cursory investigations of
potential sites for salons, and half-hearted attempts to initiate
the business relationships necessary to open a salon.” Id. The
court accordingly affirmed the Board’s decision to cancel the
registration. Id. at 1450.
In this case, Plaintiff admitted that he “ceased production
of Pirate’s Blood in March of 2011.” Rec. Docs. 1 at ¶ 6; 54-3 at
38. He also admitted that he did not advertise Pirate’s Blood at
any time from April of 2011 to the present. Rec. Doc. 54-3 at 40.
Therefore, there is evidence that Plaintiff discontinued use of
the mark. Action Ink, 2013 WL 12106878, at *3. However, Plaintiff’s
amended complaint suggested that he “met with various persons and
companies in 2012, 2013, 2014, and 2015 regarding the production
and sale of Pirate’s Blood. [Plaintiff] fully intended/intends to
continue brewing and selling Pirate’s Blood under its trademarked
name and logo.” Rec. Doc. 21 at ¶ 6(A). This Court previously
instant motions for summary judgment.
Brewhouse at various times between 2012 and 2014 (Rec. Doc. 54-3
at 47-48, 56-58)4 and otherwise made informal visits to Pensacola
Defendants subpoenaed documents from Covington Brewhouse. Rec. Docs. 54-2 at
7 n.1; 54-4 at 5-12. In response, Covington Brewhouse produced an e-mail string.
Rec. Doc. 54-4 at 13-18. Plaintiff e-mailed Broussard on March 14, 2014
outlining his five-year relationship with Heiner Brau and New Orleans Beer
Company and explaining that “Pirate’s Blood Red Ale was an established product
in the marketplace and a profitable venture . . . . I would like very much to
establish a new relationship with Covington Brewhouse to contract brew Pirate’s
Blood Red Ale. Is it possible to set up a meeting to discuss?” Id. at 17-18.
The rest of the string consists of internal emails between Covington Brewhouse
representatives. Id. at 13-17. They concluded that they were not interested in
doing business with Plaintiff. Id. at 13. During his deposition, Plaintiff
admitted that he “went to the brewery without announcing myself just to get in
there and see” and that “there was hardly ever any prearranged meetings ever
done. You pop in somebody, get in their face and you ask them a question. That’s
what we have to do.” Rec. Doc. 54-3 at 57-58.
Bay Brewery in 2013 (id. at 51-53),5 Gulf Coast Brewing between
2015 and 2017 (id. at 54-55),6 40 Arpent Brewery between 2014
and 2016 (id. at 67-69),7
scheduled a formal meeting
or (3) negotiated any type of contract. None of the breweries
produced Plaintiff’s beer for sale. Id. at 115.
Plaintiff argues that, in addition to the activities noted
above, he (1) had Pirate’s Blood home-brewed during 2011 and
2012 in order to enter it into the Emerald Coast Beer Festival,
a “beer tasting event for charity purposes” (Rec. Doc. 56 at
3 (citing Rec. Doc. 56-1 at 11)); and (2) filed to trademark
Pirate’s Blood name and logo on September 18, 2014 and
subsequently litigated two oppositions to the trademark for the
ensuing year and a half (id. at 4 (citing Rec. Doc. 56-1 at 34,
Again, Defendants subpoenaed documents from Pensacola Bay Brewery. Rec. Doc.
54-4 at 20-27. Pensacola Bay Brewery objected to the subpoena as improperly
served and in violation of Federal Rule of Civil Procedure 45(c)(2)(A). Id. at
28-29. Nonetheless, it also stated that it had no knowledge of any responsive
documents. Id. at 29. During his deposition, Plaintiff again explained that he
would “just show up” at the brewery. Rec. Doc. 54-3 at 52-53.
6 Again, Defendants subpoenaed documents from Gulf Coasting Brewing. Rec. Doc.
54-4 at 31-38. A brewery representative responded that it had “no documents,
[n]otes or discussions recorded or anything that I can offer.” Id. at 39.
7 Again, Defendants subpoenaed documents from 40 Arpent Brewery. Rec. Doc. 544 at 41-48. The response included only an e-mail from Plaintiff who explained
that “You have not brewed my Pirate’s Blood therefore [t]here are no documents.”
Id. at 49. In his response to the instant motions, Plaintiff explains that 40
Arpent Brewery “halted all potential negotiations until after this litigation
is resolved.” Rec. Doc. 56 at 4 (citing Rec. Doc. 56-1 at 18-19)).
8 The application apparently remains pending after one of the oppositions was
withdrawn. Rec. Doc. 56-1 at 89, 103.
Plaintiff further argues that the various cases cited by
Defendants are distinguishable because he must rely “upon a brewery
to make his product. Thus, if a brewery decides to not contract
brew Pirate’s Blood, then Pirate’s Blood will not be used in the
ordinary course of trade.” Rec. Doc. 56 at 8. He maintains that
his various activities evidence his intent to resume use of the
Pirate’s Blood mark and therefore amount to a genuine issue of
material fact precluding summary judgment. Id. at 10.
Plaintiff’s participation in the beer festival and subsequent
trademark efforts are insufficient to overcome the presumption of
abandonment. See, e.g., Hughes v. Design Look Inc., 693 F. Supp.
1500, 1506 (S.D.N.Y. 1988) (noting that the use of unrelated images
“to sell products on two occasions, [was] not sufficient to
overcome the inference of abandonment”); Emergency One, Inc. v.
Am. FireEagle, Ltd., 228 F.3d 531, 539 (4th Cir. 2000) (“the ‘use’
promotional or token uses”); Exxon Corp. v. Humble Expl. Co., 695
F.2d 96, 99 (5th Cir. 1983) (determining that limited sales of
products with the HUMBLE mark on the label and the use of the mark
on invoices were not sufficient where the sales did not depend on
the mark “for identification of source. To the contrary, purchasers
were informed that the selected shipments would bear the HUMBLE
name or be accompanied by an HUMBLE invoice but were the desired
Exxon products. That is, the HUMBLE mark did not with these sales
play the role of a mark. That casting, however, is central to the
plot that the Lanham Act rests on the idea of registration of marks
otherwise born of use rather than the creation of marks by the act
of registration. That precept finds expression in the Lanham Act
requirement that to maintain a mark in the absence of use there
must be an intent to resume use . . . The Act does not allow the
preservation of a mark solely to prevent its use by others.”).
Further, Plaintiff’s filing of a trademark application does
not rebut evidence here of the prior abandonment. Action Ink, 2013
WL 12106878, at *10 (where the renewal of a registration after
abandonment was insufficient).
sporadic contacts with various breweries from the sales efforts in
Specht and the occasional meetings in Rivard. Plaintiff’s contacts
with the breweries were “sporadic attempts to solicit business”
(747 F.3d at 935) and “half-hearted attempts to initiate the
business relationships necessary to” produce Pirate’s Blood (133
F.3d at 1450). Plaintiff’s participation in the Emerald Coast Beer
Silverman plaintiff’s licensing of the programs for limited use in
documentary and educational programs; it was a “minor activity”
that did not “sufficiently rekindle the public’s identification of
the mark with the proprietor . . . .” 870 F.2d at 47-48. Even if
this activity was sufficient to overcome the presumption, it took
place five years ago, in 2012. Plaintiff’s filing of a trademark
application does not amount to “use in commerce,” the “bona fide
use of [the] mark in the ordinary course of trade” (15 U.S.C. §
1127) and is therefore insufficient to overcome the presumption.
Further, “[c]hallenging infringing uses . . . is not use and is
insufficient to forestall abandonment . . . . Essentially, such
use neither sufficiently rekindles the public’s identification of
the mark with the proprietor, which is the essential condition for
commercial use.” Action Ink, 2013 WL 12106878, at *9 (citation and
alterations omitted). Finally, Plaintiff failed to cite to any
case in which summary judgment was denied because the plaintiff’s
“use” of the mark was outside his control. It is true that
“temporary abandonment is excusable when non-use is caused by
changing or distressed market conditions.” Action Ink, 2013 WL
12106878, at *8 (citations omitted). However, Plaintiff failed to
present evidence of an “unstable or depressed market condition”
businessman, who had a bona fide intent to use the mark in United
States commerce, would have undertaken” (Rivard, 133 F.3d at 1449).
Ultimately, “[t]he mere fact that [Plaintiff] did not intend
to abandon the Mark is insufficient as a matter of law” and “‘a
businessman intending to resume commercial use of his mark would
or should not allow [a six-year] lapse to occur.’” Action Ink,
2013 WL 12106878, at *9-10 (considering a fifteen-year lapse)
(quoting E. Remy Martin & Co., S.A. v. Shaw-Ross Int’l Imports,
Inc., 756 F.2d 1525, 1532 (11th Cir. 1985) (considering a fouryear lapse)).
New Orleans, Louisiana, this 22nd day of September, 2017.
SENIOR UNITED STATES DISTRICT JUDGE
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